While being self-employed has its advantages, it can make applying for a standard home loan more complicated.

Without access to regular payslips or salary documentation, low-doc home loans give freelancers, contract workers, investors and self-employed borrowers the option of applying for a home loan with less documentation than standard home loans.

Find and compare low doc home loans

Sort By
Product
Advertised Rate
Comparison Rate*
Company
Monthly Repayment
Features
Real Time Rating™
Go to site

3.39%

Variable

3.59%

Pepper

$1,484

Redraw facility
Offset Account
Borrow up to 85%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

2.85%

Variable

3.05%

Pepper

$1,399

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

2.65

/ 5
More details

2.85%

Variable

3.05%

Pepper

$1,399

Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied

2.65

/ 5
More details

2.99%

Variable

3.19%

Pepper

$1,421

Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied

2.34

/ 5
More details

3.09%

Variable

3.29%

Pepper

$1,437

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

2.11

/ 5
More details

3.35%

Variable

3.55%

Pepper

$1,478

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.35%

Variable

3.55%

Pepper

$1,478

Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.35%

Variable

3.55%

Pepper

$1,478

Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.35%

Variable

3.55%

Pepper

$1,478

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.60%

Variable

3.66%

Yellow Brick Road

$1,518

Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied

1.83

/ 5
More details

3.60%

Variable

3.66%

RESI Mortgage Corp

$1,518

Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied

1.83

/ 5
More details

3.60%

Variable

3.66%

Yellow Brick Road

$1,518

Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied

1.76

/ 5
More details

3.49%

Variable

3.69%

Pepper

$1,500

Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.49%

Variable

3.69%

Pepper

$1,500

Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.59%

Variable

3.79%

Pepper

$1,516

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.59%

Variable

3.79%

Pepper

$1,516

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.69%

Variable

3.88%

Pepper

$1,533

Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

3.97%

Variable

4.01%

Resimac

$1,579

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.58

/ 5
More details

4.12%

Variable

4.06%

Resimac

$1,030

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

1.58

/ 5
More details

3.89%

Variable

4.08%

Pepper

$1,565

Redraw facility
Offset Account
Borrow up to 85%
Extra Repayments
Interest Only
Owner Occupied

1.85

/ 5
More details

Learn more about home loans

What is a low-doc home loan?

Low-doc home loans get their name from providing low documentation. For borrowers who are self-employed, those who freelance or own their own small business, getting access to payslips and group certificates can be challenging. The lack of traditional documentation can make applying for a standard mortgage a little trickier. That’s where a low-doc home loan comes in, giving non-traditional borrowers access to home loans minus the usual documentation.

Low-doc home loans are generally designed for self-employed borrowers who have the deposit and income to be able to pay off a mortgage but may not have all the standard documentation to prove it.

Back in the 1990s, mortgage brokers recognised that not all lenders fit into one category. Discovering a valuable niche in self-employed lending, they tapped into this group of viable borrowers and created a new category of home loans called low-doc home loans.

Until low-doc home loans came along, getting access to a mortgage was difficult for non-traditional borrowers. What low-doc loans do is provide self-employed, freelancers and small business owners with the ability to provide different kinds of proof of income documentation when applying for a home loan.

With the number of self-employed borrowers on the rise, the increasing demand for low-doc home loans means there are a lot more options available for non-traditional borrowers. With low-doc home loans now available from all sorts of lenders, it’s important to compare your options and find the best low-doc home loan for you.

As self-employed borrowers generally don’t look as solid on paper as more traditional employees with pay slips, banks and lenders offering low-doc home loans will often insist borrowers pay a larger deposit, and some low-doc home loans may have higher interest rates than traditional loans. Having an excellent credit history can help to maximise your available options.

While each low-doc home loan lender will have their own rules and conditions, self-employed borrowers will generally have to provide at least two years of personal tax returns, business activity statements (BAS), profit and loss statements, other relevant financial statements and in some cases an accountant’s letter verifying their financial position.

How to compare low-doc home loans

Low-doc home loans have come a long way in recent years. With many options on the market, there’s no such thing as a one-size-fits-all low-doc home loan. Some lenders may offer specific low-doc home loans, while others may offer a low-doc version of a regular home loan. With so many options on the market, it can be hard to know how to compare low-doc home loans. Here’s what to look out for when comparing low-doc home loans.

Interest rate

Start by looking at the interest rate. Depending on the low-doc home loan, you may have the option of choosing either fixed or variable interest rates. A fixed-rate option will allow you to set the interest rate for a period. While the fixed interest rate is usually higher than a variable rate, it will give you the certainty of making set repayments for a fixed period. Your other option is to pick the variable rate and wear the risk that rates may rise, which will make your repayments more expensive. Some low-doc home loans offer a split rate option which lets you split part of your loan between both a fixed and a variable interest rate.

Loan type

When you apply for a home loan, you’ll need to pay back both the principal amount you borrow and the interest. Some low-doc loans may offer an interest-only option, which lets you pay back the minimum amount of interest and not the principle for a fixed period.

Loan features

When comparing low-doc home loans, it’s important to look beyond the interest rate. The interest rate is an important factor to consider and compare, but there are many other aspects to weigh up.

Extra repayments

You might want a loan that allows you to make extra repayments. If you’re self-employed or freelancing, there may be periods of time when you’re earning more. In those periods, you may want to use the extra cash to pay down your home loan. A loan that allows you to make additional repayments will let you pay extra into your home loan which will ultimately reduce the amount of interest you pay over the life of the loan. Bear in mind that some loans that offer this feature may charge a small fee for it.

Redraw facility

If your cash flow is unstable or varies throughout the year, a loan which offers a redraw feature may help buffer any ebbs and flows. A redraw facility allows you to withdraw any additional repayments you’ve made into your home loan. While the money is there to be redrawn, remember that you’ll still have to pay it back and it may push your repayment amounts up. As low-doc home loans generally tend to have lower interest rates than credit cards and personal loans, it can make more financial sense to use the redraw facility than applying for a personal loan.

Offset account

If you’ve got savings or any extra cash sitting in a savings account, you might want a low-doc home loan with an offset account. An offset account that’s attached to your home loan may help save you interest and potentially shave years off your loan. For example, if you’ve got a $500,000 home loan and a balance of $40,000 in an offset account, you’ll only be charged interest on the balance of $460,000. The amount in your offset account is offset against the loan balance, potentially saving you interest and money over the life of the loan.

Generally speaking, offset accounts are usually only available with variable interest rate low-doc home loans, so before you apply, do your research to find a loan that suits your needs.

Other features to consider

Given that low-doc home loans are generally riskier from a lender’s perspective, the bank may require a bigger deposit than a full-doc home loan. When you’re comparing low-doc home loans, look out for the loan-to-value ratio (LVR) percentages. As a general rule, loans that have a LVR of over 80 per cent are required to pay lender’s mortgage insurance (LMI). To avoid any extra charges, take note of the LVR and deposit requirements.

Other low-doc home loan features to look out for include loan portability which lets you take your low-doc home loan with you when you move, instead of refinancing

Depending on your cash flow, you may be able to find a loan that lets you change your repayments from monthly to weekly or fortnightly.

How do I apply for a low-doc home loan in Australia?

Once you’ve compared your low-doc home loan options, found a loan that suits you, and checked that you meet the eligibility requirements, you will need to gather your documentation before you apply. While each lender has their own home loan application process, they may generally require some or all of the following documentation:

  • Proof of identification
  • Proof you’ve been working in the same industry for at least 12 months
  • A registered business name and an ABN
  • At least 12 months of lodged business activity statements (BAS statements)
  • Proof of registration of GST
  • Personal and business bank statementsAn income declaration from your accountant

Frequently asked questions

Who has the best home loan?

Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you. 

How do I take out a low-deposit home loan?

If you want to take out a low-deposit home loan, it might be a good idea to consult a mortgage broker who can give you professional financial advice and organise the mortgage for you.

Another way to take out a low-deposit home loan is to do your own research with a comparison website like RateCity. Once you’ve identified your preferred mortgage, you can apply through RateCity or go direct to the lender.

How common are low-deposit home loans?

Low-deposit home loans aren’t as common as they once were, because they’re regarded as relatively risky and the banking regulator (APRA) is trying to reduce risk from the mortgage market.

However, if you do your research, you’ll find there is still a fairly wide selection of banks, credit unions and non-bank lenders that offers low-deposit home loans.

What is a fixed home loan?

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

What is a variable home loan?

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

How do I refinance my home loan?

Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.

Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.

Who offers 40 year mortgages?

Home loans spanning 40 years are offered by select lenders, though the loan period is much longer than a standard 30-year home loan. You're more likely to find a maximum of 35 years, such as is the case with Teacher’s Mutual Bank

Currently, 40 year home loan lenders in Australia include AlphaBeta Money, BCU, G&C Mutual Bank, Pepper, and Sydney Mutual Bank.

Even though these lengthier loans 35 to 40 year loans do exist on the market, they are not overwhelmingly popular, as the extra interest you pay compared to a 30-year loan can be over $100,000 or more.

What are the responsibilities of a mortgage broker?

Mortgage brokers act as the go-between for borrowers looking for a home loan and the lenders offering the loan. They offer personalised advice to help borrowers choose the right home loan for their needs.

In Australia, mortgage brokers are required by law to carry an Australian Credit License (ACL) if they offer credit assistance services. Which is the legal term for guidance regarding the different kinds of credit offered by lenders, including home loan mortgages. They may not need this license if they are working for an aggregator, for instance, as a franchisee. In both these situations, they need to comply with the regulations laid down by the Australian Securities and Investments Commission (ASIC).

These regulations, which are stipulated by Australian legislation, require mortgage brokers to comply with what are called “responsible lending” and “best interest” obligations. Responsible lending obligations mean brokers have to suggest “suitable” home loans. This means loans that you can easily qualify for,  actually meet your needs, and don’t prove unnecessarily challenging for you.

Starting 1 January 2021, mortgage brokers must comply with best interest obligations in addition to responsible lending obligations. These require mortgage brokers to act in the best interest of their customers and also requires them to prioritise their customers’ interests over their own. For instance, a mortgage broker may not recommend a lender who gives them a commission if that lender’s home loan offer does not benefit that particular customer.

What happens to my home loan when interest rates rise?

If you are on a variable rate home loan, every so often your rate will be subject to increases and decreases. Rate changes are determined by your lender, not the Reserve Bank of Australia, however often when the RBA changes the cash rate, a number of banks will follow suit, at least to some extent. You can use RateCity cash rate to check how the latest interest rate change affected your mortgage interest rate.

When your rate rises, you will be required to pay your bank more each month in mortgage repayments. Similarly, if your interest rate is cut, then your monthly repayments will decrease. Your lender will notify you of what your new repayments will be, although you can do the calculations yourself, and compare other home loan rates using our mortgage calculator.

There is no way of conclusively predicting when interest rates will go up or down on home loans so if you prefer a more stable approach consider opting for a fixed rate loan.

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

What is the difference between fixed, variable and split rates?

Fixed rate

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

Variable rate

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

Split rates home loans

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still wants to retain some of the additional features variable loans typically provide such as an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

Can I get a home loan if I am on an employment contract?

Some lenders will allow you to apply for a mortgage if you are a contractor or freelancer. However, many lenders prefer you to be in a permanent, ongoing role, because a more stable income means you’re more likely to keep up with your repayments.

If you’re a contractor, freelancer, or are otherwise self-employed, it may still be possible to apply for a low-doc home loan, as these mortgages require less specific proof of income.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

Is there a limit to how many times I can refinance?

There is no set limit to how many times you are allowed to refinance. Some surveyed RateCity users have refinanced up to three times.

However, if you refinance several times in short succession, it could affect your credit score. Lenders assess your credit score when you apply for new loans, so if you end up with bad credit, you may not be able to refinance if and when you really need to.

Before refinancing multiple times, consider getting a copy of your credit report and ensure your credit history is in good shape for future refinances.

I have a poor credit rating. Am I still able to get a mortgage?

Some lenders still allow you to apply for a home loan if you have impaired credit. However, you may pay a slightly higher interest rate and/or higher fees. This is to help offset the higher risk that you may default on your repayments.

I can't pick a loan. Should I apply to multiple lenders?

Applying for home loans with multiple lenders at once can affect your credit history, as multiple loan applications in short succession can make you look like a risky borrower. Comparing home loans from different lenders, assessing their features and benefits, and making one application to a preferred lender may help to improve your chances of success

Will I be paying two mortgages at once when I refinance?

No, given the way the loan and title transfer works, you will not have to pay two mortgages at the one time. You will make your last monthly repayment on loan number one and then the following month you will start paying off loan number two.

If I don't like my new lender after I refinance, can I go back to my previous lender?

If you wish to return to your previous lender after refinancing, you will have to go through the refinancing process again and pay a second set of discharge and upfront fees. 

Therefore, before you refinance, it’s important to weigh up the new prospective lender against your current lender in a number of areas, including fees, flexibility, customer service and interest rate.

Can I refinance if I have other products bundled with my home loan?

If your home loan was part of a package deal that included access to credit cards, transaction accounts or term deposits from the same lender, switching all of these over to a new lender can seem daunting. However, some lenders offer to manage part of this process for you as an incentive to refinance with them – contact your lender to learn more about what they offer.